More Questions About The Verizon/FairPoint Deal

Maybe it's serendipity. Maybe it's straight coincidence. Or maybe someone somewhere else has been reading some of my posts and thought it was an issue they should cover.

I any case, my post on Saturday voiced my doubts about the impending buyout of Verizon's wireline business and customers by FairPoint Communications. There's too much I don't know. There's too much that Verizon or FairPoint haven't talked about publicly that makes me wonder if there's something that FairPoint or the state PUC's (Public Utility Commission, or the equivalent thereof) have missed or are deliberately overlooking.

It's no surprise that the two unions representing Verizon employees, the Communications Workers of America (CWA) and the International Brotherhood of Electrical Workers (IBEW), are against the deal. While a number of mergers over the years have not been a problem for either union (New England Telephone became NYNEX when they merged with New York Telephone, then Bell Atlantic when NYNEX merged with Atlantic Bell, then Verizon when Bell Atlantic merged with GTE), this one is different because it's not a merger but a split. They will end up part of a much smaller company, which they see as limiting their options.

FairPoint's promise to expand broadband coverage is being met with skepticism, if not outright scorn. The biggest problem is that they're expanding DSL, or Digital Subscriber Line technology, an older technology that is quickly being supplanted by fiber optics. DSL has a limited bandwidth capability, some of which is determined by how far a customer is from the local central office or outlying DSL concentrator. At the extreme range of DSL a customer might be lucky to have 768kbs (kilobits per second). Fiber, on the other hand, can provide 1 or 2 Gbs (gigabits per second, or billions of bits per second) regardless of the distance from the central office. It has potentially unlimited bandwidth. DSL does not.

Many of those without any kind of broadband connectivity would probably welcome something as slow as 768kbs, which is 14 times faster than dialup access, but that would still leave them unable to do many of the things that those of us fortunate enough to have high enough data rates can do without thinking. I believe that many would consider it a beginning, not an end.

In the mean time other technologies are making inroads in providing high-speed broadband services in rural areas. While still not having the bandwidth capabilities of fiber optics, they can provide data speeds above that of DSL. One of those technologies is satellite.

For many rural customers satellite is the only means of receiving television service. CATV systems either don't serve the area or bypass some sections in rural towns because the customer density is too low to justify building out their network. Satellite doesn't have that problem. The same is true for Internet connectivity, too. While there has been some data services via satellite for some time, it's only been recently that the cost has come down to the point where the average consumer can also take advantage without bankrupting themselves. While still not as cheap as DSL, cable, or Fiber-to-the-Home, it's still reasonable enough for those desiring a fast connection but having no other means of obtaining it. As the cost of satellite service has been dropping, the available connection speeds have been climbing as the providers have been adding newer satellites with more bandwidth.

Another possible path to higher Internet connectivity is fixed-point wireless, something that at this point exists in very few markets. Fixed-point wireless should not be confused with WiFi or WiMax, systems that allow connectivity for portable devices like laptops, PDAs, and smart phones.

The advantage of fixed-point wireless is that, like satellite, there's little infrastructure that requires building out, like there is for cable, DSL or fiber optics. This makes it a more attractive alternative for some rural areas. But like satellite, the costs may be higher than a traditional connection.

Should FairPoint become the de facto telco for northern New England, they had best believe that many of its customers will be watching and waiting to see if they will keep their promises of expanded broadband coverage. They will also be watching to see if this deal will end up leaving northern New England in the broadband hinterlands as high speed technology advances while FairPoint continues to deploy an already outdated technology.